Pappas v. Asbel

• Decision Date: 23 December 1998
• Citation: 724 A.2d 889,555 Pa. 342
• Parties: Basile PAPPAS and Theodora Pappas, H/W, Plaintiffs, v. David S. ASBEL, D.O., Defendant. Pennsylvania Hospital Insurance Co. (PHICO) and the Commonwealth of Pennsylvania Medical Professional Liability Catastrophe Loss Fund (Cat Fund), Defendants/Appellees, v. United States Healthcare Systems of Pennsylvania, Inc., Additional Defendant/Appellant.
• Court: Pennsylvania Supreme Court

555 Pa. 342

724 A.2d 889

Basile PAPPAS and Theodora Pappas, H/W, Plaintiffs, v.David S. ASBEL, D.O., Defendant.

Pennsylvania Hospital Insurance Co. (PHICO) and the Commonwealth of Pennsylvania Medical Professional Liability Catastrophe Loss Fund (Cat Fund), Defendants/Appellees, v.United States Healthcare Systems of Pennsylvania, Inc., AdditionalDefendant/Appellant.

Supreme Court of Pennsylvania.

Argued April 30, 1997.

Decided December 23, 1998.

Reargument Denied February 12, 1999.

David H. Marion, Francis Patrick Newell, Philadelphia, for US Healthcare Systems of PA.

Stephen A. Ryan, for PA Hosp. Ins. & Commonwealth.

James E. Colleran, Philadelphia, for Basile and Theodora Pappas.

James I. Devine, Philadelphia, for David S. Asbel, D.O.

Before FLAHERTY, C.J., and ZAPPALA, CAPPY, CASTILLE, NIGRO, and NEWMAN, JJ.

OPINION OF THE COURT

CAPPY, Justice.

This is an appeal from the order of the Superior Court reversing the trial court's entry of summary judgment in favor of third-party defendantUnited States Healthcare Systems of Pennsylvania, Inc.("U.S. Healthcare").The issue on which this court granted allocatur is whether the Employee Retirement Income Security Act of 1974("ERISA"), 29 U.S.C. 1001, et seq., preempts the state tort law claims brought against U.S. Healthcare.For reasons which differ from those relied upon by the Superior Court, we find that ERISA does not preempt these claims.We therefore affirm the order of the Superior Court.

At 11:00 a.m. on May 21, 1991, Basile Pappas("Pappas") was admitted to Haverford Community Hospital ("Haverford") through its emergency room complaining of paralysis and numbness in his extremities.At the time of his admission, Pappas was an insured of HMO-PA, a health maintenance organization operated by U.S. Healthcare.

Dr. Stephen Dickter, the emergency room physician, concluded that Pappas was suffering from an epidural abscess which was pressing on Pappas' spinal column.Dr. Dickter consulted with a neurologist and a neurosurgeon; the physicians concurred that Pappas' condition constituted a neurological emergency.Given the circumstances, Dr. Dickter felt that it was in Pappas' best interests to receive treatment at a university hospital.

Dr. Dickter made arrangements to transfer Pappas to Jefferson University Hospital ("Jefferson") for further treatment.At approximately 12:40 p.m. when the ambulance arrived, Dr. Dickter was alerted to the fact that U.S. Healthcare was denying authorization for treatment at Jefferson.Ten minutes later, Dr. Dickter contacted U.S. Healthcare to obtain authorization for the transfer to Jefferson.At 1:15 p.m., U.S. Healthcare responded to Dr. Dickter's inquiry and advised him that authorization for treatment at Jefferson was still being denied, but that Pappas could be transferred to either Hahnemann University ("Hahnemann"), Temple University or Medical College of Pennsylvania ("MCP").

Dr. Dickter immediately contacted Hahnemann.That facility advised Haverford at approximately 2:20 p.m. that it would not have information on its ability to receive Pappas for at least another half hour.MCP was then reached and within minutes it agreed to accept Pappas; Pappas was ultimately transported there at 3:30 p.m. Pappas now suffers from permanent quadriplegia resulting from compression of his spine by the abscess.

Pappas and his wife filed suit against Dr. David Asbel, his primary care physician, and Haverford.They claimed that Dr. Asbel had committed medical malpractice and that Haverford was negligent in causing an inordinate delay in transferring him to a facility equipped and immediately available to handle his neurological emergency.

Haverford then filed a third party complaint against U.S. Healthcare, joining it as a partydefendant for its refusal to authorize the transfer of Pappas to a hospital selected by the Haverford physicians.Dr. Asbel also filed a cross-claim against U.S. Healthcare seeking contribution and indemnity.

U.S. Healthcare filed a motion for summary judgment on all of the third party claims, alleging that the third party claims are preempted by § 1144(a) of ERISA.¹The trial court granted the motion.²The Superior Court on appeal, however, determined that ERISA did not preempt the state law claims.This court subsequently granted U.S. Healthcare's Petition for Allowance of Appeal in order to determine whether these third party claims fall within the scope of those state actions which are preempted by ERISA.In reviewing whether a trial court's award of summary judgment was appropriate, we view the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.Pennsylvania State University v. County of Centre,532 Pa. 142, 144-145, 615 A.2d 303, 304(1992).Only where there is no genuine issue as to any material fact and it is clear that the moving party is entitled to a judgment as a matter of law will summary judgment be entered.Skipworth v. Lead Industries Assoc., Inc.,547 Pa. 224, 230, 690 A.2d 169, 171(1997).As the issue presented in this case is one of law, our scope of review is plenary.SeePhillips v. A-BEST Products Co.,542 Pa. 124, 130, 665 A.2d 1167, 1170(1995).

Our analysis begins with a review of the basic principles of preemption law.The Supremacy Clause of the United States Constitution provides that the laws of the federal government "shall be the supreme Law of the Land; . . . any Thing in the Constitution or Laws of any state to the Contrary notwithstanding."U.S. Const., art. VI, cl. 2.It is this clause which gives to the United States Congress power to preempt state law.

In determining whether state law is preempted by a federal law, a reviewing court is cautioned that such a review "start[s] with the assumption that the historic police powers of the States [are] not to be superseded by . . . Federal Act unless it [is] the clear and manifest purpose of Congress."Cipollone v. Liggett Group,505 U.S. 504, 516, 112 S.Ct. 2608, 2617, 120 L.Ed.2d 407, 422(1992)(citations omitted).Thus, Congress' intent is the "ultimate touchstone" in this analysis.Id.

A state law can be preempted in one of three ways.The first is where the United States Congress enacts a provision expressly preempting state law.Pacific Gas and Electric Co. v. State Energy Resources Conservation and Development Comm'n,461 U.S. 190, 103 S.Ct. 1713, 75 L.Ed.2d 752(1983).Even where there is no explicit preemption provision, preemption will still be found where Congress has legislated the field so comprehensively that it has implicitly communicated the intent to occupy a given field to the exclusion of state law.Schneidewind v. ANR Pipeline Co.,485 U.S. 293, 299-300, 108 S.Ct. 1145, 1150-51, 99 L.Ed.2d 316, 325(1988).Finally, a state law will be preempted where a state law actually conflicts with federal law.Id.See alsoCellucci v. General Motors Corp.,550 Pa. 407, 706 A.2d 806, (1998).

It is this first method of preemption which is at issue in this matter.The express preemption provision in question states that "the provisions of this subchapter . . . shall supersede any and all State laws³ insofar as they may now or hereafter relate to any employee benefit plan. . . ."29 U.S.C. § 1144(a).

None of the parties in this matter dispute that the United States Supreme Court has yet to speak directly to the issue of whether negligence claims against a health maintenance organization "relate to" an ERISA plan.U.S. Healthcare, however, cites to several United States Supreme Courtcases from the 1980's and early 1990's as support for its contention that these claims should be preempted by ERISA.

U.S. Healthcare is indeed accurate in its claim that the Supreme Court had given the ERISA preemption provision an almost breathtaking scope in the 1980's and early 1990's.The Court stated that the preemption provisions were "deliberately expansive".Pilot Life Ins. Co. v. Dedeaux,481 U.S. 41, 46, 107 S.Ct. 1549, 1552, 95 L.Ed.2d 39, 49(1987).The Court at that time held the opinion that "[t]he breadth of [§ 1144(a)'s] preemptive reach is apparent from that section's language."Shaw v. Delta Air Lines, Inc.,463 U.S. 85, 96, 103 S.Ct. 2890, 2899-2900, 77 L.Ed.2d 490, 501(1983).It declared that the words of the preemption provision were to be given their "broad common-sense meaning, such that a state law `relate[s] to' a benefit plan in the normal sense of the phrase, if it has a connection with or reference to such a plan."Metropolitan Life Ins. Co. v. Massachusetts,471 U.S. 724, 739, 105 S.Ct. 2380, 2388, 85 L.Ed.2d 728, 740(1985)(citations omitted).In the vast majority of cases concerning ERISA preemption addressed by the Court during this period, it was found that the state laws being reviewed had some "connection with" or "reference to" the ERISA plan.Although the Court did concede that the ERISA preemption provision "perhaps [is] not the model of legislative drafting" that the Court would hope for, Pilot Life,481 U.S. at 46,107 S.Ct. at 1552,95 L.Ed.2d at 47, the Court in the 1980's and early 1990's did not admit to any possibility that the plain meaning of the words of the preemption provision could not be given effect.

The Court noticeably changed tack in New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co.,514 U.S. 645, 115 S.Ct. 1671, 131 L.Ed.2d 695(1995).In Travelers, the unanimous Court determined that a New York statute which required hospitals to collect surcharges from patients covered by all commercial insurers other than Blue Cross/Blue Shield was not preempted by ERISA.After years of striving to make sense of the plain language of the preemption provision, the Court frankly admitted that the text is "unhelpful".Id. at 656, 115 S.Ct. at 1677, 131 L.Ed.2d at 705.The Court recognized that "[i]f `relate to' were taken to...